Question: DuPont identity. Given the data below: Financial Information ($ in millions) Company Sales Net Income Total Assets Liabilities MSFT $77,772 $21,890 $142,416 $63,406 BA $86,566

DuPont identity. Given the data below:

Financial Information ($ in millions)

Company

Sales

Net Income

Total Assets

Liabilities

MSFT

$77,772

$21,890

$142,416

$63,406

BA

$86,566

$4,486

$92,618

$77,717

WMT

$468,624

$16,916

$203,115

$126,242

PG

$82,525

$11,327

$139,261

$71,015

WM

$13,841

$205

$22,618

$16,774

for the following five actively traded companies: Microsoft (MSFT), Boeing (BA), Walmart (WMT), Procter and Gamble (PG), and Waste Management (WM), use the three components of the DuPont identityoperating efficiency, as measured by the profit margin (net income/sales); asset management efficiency, as measured by asset turnover (sales/total assets); and financial leverage, as measured by the equity multiplier (total assets/total equity)to find the return on equity for these five companies. Based on these components and the ROE, which company do you think is doing the best job for its shareholders?

First, find the equity of each company.

The equity for Microsoft is

$enter your response here million.(Round to the nearest million dollars.)

The equity for Boeing is

$enter your response here million.(Round to the nearest million dollars.)

The equity for Walmart is

$enter your response here million.(Round to the nearest million dollars.)

The equity for Procter and Gamble is

$enter your response here million.(Round to the nearest million dollars.)

The equity for Waste Management is

$enter your response here million.(Round to the nearest million dollars.)

Next, calculate the three components of the DuPont identity.

The profit margin for Microsoft is

enter your response here%.

(Round to two decimal places.)

The profit margin for Boeing is

enter your response here%.

(Round to two decimal places.)

The profit margin for Walmart is

enter your response here%.

(Round to two decimal places.)

The profit margin for Procter and Gamble is

enter your response here%.

(Round to two decimal places.)

The profit margin for Waste Management is

enter your response here%.

(Round to two decimal places.)

The asset turnover for Microsoft is

enter your response here.

(Round to four decimal places.)

The asset turnover for Boeing is

enter your response here.

(Round to four decimal places.)

The asset turnover for Walmart is

enter your response here.

(Round to four decimal places.)

The asset turnover for Procter and Gamble is

enter your response here.

(Round to four decimal places.)

The asset turnover for Waste Management is

enter your response here.

(Round to four decimal places.)

The equity multiplier for Microsoft is

enter your response here.

(Round to four decimal places.)

The equity multiplier for Boeing is

enter your response here.

(Round to four decimal places.)

The equity multiplier for Walmart is

enter your response here.

(Round to four decimal places.)

The equity multiplier for Procter and Gamble is

enter your response here.

(Round to four decimal places.)

The equity multiplier for Waste Management is

enter your response here.

(Round to four decimal places.)

Last, use the three components of the DuPont identity to find the ROE.

The ROE for Microsoft is

enter your response here%.

(Round to two decimal places.)

The ROE for Boeing is

enter your response here%.

(Round to two decimal places.)

The ROE for Walmart is

enter your response here%.

(Round to two decimal places.)

The ROE for Procter and Gamble is

enter your response here%.

(Round to two decimal places.)

The ROE for Waste Management is

enter your response here%.

(Round to two decimal places.)

Based on these components and the ROE, which company do you think is doing the best job for its shareholders?(Select the best response.)

A. Walmart is the most operationally efficient, Microsoft is the most efficient in management, and Boeing is the most efficient in financial leverage. Boeing is the "best" to its shareholders with the highest ROE of the five.

B. Microsoft is the most operationally efficient, Boeing is the most efficient in management, and Walmart is the most efficient in financial leverage. Microsoft is the "best" to its shareholders with the highest ROE of the five.

C. Microsoft is the most operationally efficient, Walmart is the most efficient in management, and Boeing is the most efficient in financial leverage. Walmart is the "best" to its shareholders with the highest ROE of the five.

D. Microsoft is the most operationally efficient, Walmart is the most efficient in management, and Boeing is the most efficient in financial leverage. Boeing is the "best" to its shareholders with the highest ROE of the five.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!